Appendix 1: Business plan for Sport Retail

Business name and address: Sport Retail 14 Lower Street Bedford Proprietors name and address: John Bull Address as above Business form: Sole trader

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Business activity: The shop will sell general sportswear, clothing, footwear and sports accessories from a good secondary retail location close to the main shopping area of Bedford. Sports covered will include football, cricket, golf, tennis, archery, skiing and other sports, as appropriate to the season. In addition, the shop will sell general sports clothing and footwear such as track suits, trainers and so on. Suppliers will include major names such as Adidas, Nike, and so on. Aims: The aim of the business is to provide an adequate income for myself and my wife. We shall be living above the shop. Objectives: 1. 2. 3. 4. Sales of 250,000 in the first year Gross profit margin of 40% Net profit margin of 16% Drawings at least 25,000

Market size and growth: The last decade has seen a substantial increase in the popularity of sport and consequently the growth of the sportswear market. It is estimated that two-thirds of time spent on leisure pursuits is devoted to sport. The estimated size of the sport clothing and footwear market is some 1 billion. The market for sport equipment is about the same size and the market for swimwear and beachwear is over 200,000. These estimates are very approximate because the demarcation between sportswear and fashionwear is becoming increasingly blurred. Competitors: Names Olympus Sports Silver St. (400 yards away) 2 Seasons Harpur St Market stall Strengths Located in main shopping area Very price competitive National promotion Shop layout appeal to young Skiing and tennis equipment Good service Well known brands Cheap Weaknesses Lack of expert advice Lack of personal service Limited range Lower end of market Poor location Cramped shop, poor displays No service Only open market day Poor quality low end of market

Your business: Strengths Personal, expert service Wide range of equipment Quality equipment Well-known brands Weaknesses Secondary location (better than 2 Seasons) Limited merchandising opportunities Cannot afford expensive promotions

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Finance and Planning

Competitive advantages: 1. Personal, expert service 2. Football links proprietor local football celebrity 3. Links with local sports clubs, schools and so on will enable equipment and sportswear to be purchased to meet their specific requirements 4. Wide range of quality merchandise Proposed customers: General public Typical market segments: School age (male and female)* Teenage and twenties Middle age (mainly male)* Impulse shopper Dedicated buyer*

Sports clubs and schools* * These are the groups we expect to attract Advertising and promotions strategy: 1. Very limited advertising in local paper: shop opening and seasonal sales. It is proposed to get a well-known sportsman to open the shop. 2. Extensive promotion to sports clubs and schools offering special equipment and sportswear and discounts. Displays may be mounted at Clubs and so on or special evenings could be arranged. 3. In-store seasonal promotions of particular sportswear or equipment. This could include special displays, promotional signs and, perhaps, a discounted loss-leader to get customers into the shop. 4. Store displays would emphasise the professional football links. Pricing strategy: We cannot compete against Olympus on price and will not attempt to do so. We will offer good quality branded merchandise at recommended retail prices. We will attempt to stock alternative merchandise and brands to Olympus. We will offer good value for money but not lowest price. Premises: 1000 square foot retail premises on Lower Street, Bedford. This is a prime secondary site close to the main shopping area of Bedford. Bedford itself offers a good location and is the main shopping centre for the north of the county. The premises are leasehold with 18 years to run, let on a full repairing and insuring basis with rent reviews every 5 years. There is a two-bedroom flat above the shop in which I intend to live with my wife. Equipment Shop display equipment only. Key people and job functions: Mr and Mrs Bull Proprietors There may be other part-time counter staff, as required for Saturday work and so on.

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Background details of key people: Mr Bull Formerly professional footballer (joined from school). Retired 4 years ago. Worked as a salesman with Rank Xerox selling photocopiers to large companies. Made redundant 6 months ago. Still maintains good links with local sports clubs and, in particular, old football club. Mrs Bull Housewife. No work experience since marriage. Prior to marriage was employed as counter staff with Marks & Spencer. Currently Parent Governor of Priory School and on organising committee for local Youth Club.

Financial highlights
12 months to: Turnover: 250,000 Profit: 40,000 before drawings Break-even: 60; 000 250; 000 150; 000 100; 000 Funding requirement: Lease purchase Redecoration Fixtures and fittings Total 20,000 5,000 15,000 40,000 30 April 2002

+ Overdraft facility as required (see cash flow) Source of funds: Own funds Bank loan 25,000 15,000

We shall be seeking a 10 year, fixed interest rate loan.

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Forecast profit and loss account

Business: Period:

Sport Retail Year to 30 April 2002

Sales: Less direct (variable) costs: materials direct wages other Total direct (variable) costs: Gross profit/contribution: Fixed costs (overheads): wages/salaries (including taxes) rent heat/light/power advertising insurance transport/travel telephone stationery/postage repairs/renewals depreciation local taxes other Professional fees other Total fixed costs Net profit Less drawings or dividends Profit retained in the business Break-even point C A B 12,000 18,000 5000 3500 2500 1500 6000 3000 2000 500 4000 150,000

250,000

(A)

150,000 100,000 (40%) (B)

60,000 (16%) (C) 40,000 25,000 15,000

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Cash flow forecast

Month: SALES Volume: Value: RECEIPTS Sales cash Sales debtors Capital introduced Grants, loans etc. VAT on sales Total (A) PAYMENTS Materials Wages/salaries Rent Heat/light/power Advertising Insurance Transport/travel Telephone Stationery/postage Repairs/renewals Local taxes Other Other Capital purchases Loan repayments Drawings/dividends VAT on purchases VAT paid to C & E Total (B) CASH BALANCES Cash flow (A)(B) Opening balance Closing balance (27.9) 1.1 11.65 (6.6) 10.8 7.0 11.0 12.0 (11.65) 7.05 19.05 19.05 7.4 6.2 7.4 13.6 9.7 13.6 23.3 1.2 23.3 24.5 24.5 67.9 22.4 5.3 2.1 0.5 17.75 24.2 12.7 2.6 1.6 2.1 4.2 22.4 24.3 23.3 2.6 3.2 3.2 4.2 29.25 17.3 19.7 1.6 2.6 2.6 5.5 29.5 14.4 0.6 20.0 0.4 20.0 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 5.0 40.0 0.5 1.0 30.0 9.0 1.5 0.5 1.0 0.5 0.5 12.0 1.0 0.5 0.75 15.0 1.0 4.5 0.2 0.5 9.0 1.0 0.2 0.5 12.0 1.0 0.2 0.5 0.75 0.5 0.25 0.5 1.0 15.0 1.0 4.5 0.3 0.5 18.0 1.0 0.2 0.5 18.0 1.0 0.2 0.5 0.75 9.0 1.0 4.5 0.3 0.5 15.0 1.0 0.2 0.5 15.0 1.0 0.2 0.5 0.75 0.5 0.25 1.5 168.0 11.0 9.0 13.5 2.5 1.5 6.0 3.0 2.0 0.5 3.5 40.0 25.0 15.0 3.5 23.5 4.4 29.4 2.6 17.6 3.5 23.5 4.4 29.4 5.3 35.3 5.3 35.3 2.6 17.6 3.5 23.5 4.4 29.4 4.4 25.0 15.0 43.9 20.0 25.0 15.0 20.0 25.0 30.0 30.0 15.0 20.0 25.0 25.0 250.0 20.0 25.0 15.0 20.0 25.0 30.0 30.0 15.0 20.0 25.0 25.0 250.0 May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr Total

29.4 333.9

28.2 309.4

(27.9) (26.8) (15.15) (21.75) (10.95) (3.95) (27.9) (26.8) (15.15) (21.75) (10.95) (3.95) 7.05